IPL : The 5 Billion Dollar Saga
Indian Premier League: How it all started?
Indian Premier League, the professional Twenty20 Cricket League has time and again dazzled one and all with its color, flair, and energy. Young players have used this platform to showcase their talent and have gone on further to build brilliant international careers.
Most of us might be aware of the very fact how this format came into existence but for a few of those who are clueless for them, an interesting story is about to unfold!
On 12 September 2007, Lalit Modi formally launched the Indian Premier League during a ceremony in New Delhi.
But that was not it when in the beginning Modi dreamt of starting this professional league, he realized that in the game of cricket, there was more beneath the soil than one could see.
2007 saw the rise of a new format in cricket Twenty20 that marked the beginning of the revolution, that is when he tweaked his original idea and this is how the Indian Premier League came into existence.
Starting from the game to the franchises’ ownership, the Indian Premier League is definitely an exciting blend of Cricket, Bollywood, and Business tycoons.
What is the business model of the Indian Premier League?
Primarily corporate India is linked with the Indian Premier League which helps Indian Premier League owners to earn crores of profits. Winning in the Indian Premier League is important, but the franchise does not depend only on it.
The major business plan of the Indian Premier League is to invite private companies to purchase cricket franchises. When the franchise is sold at a large price, corporate will be attracted to invest in the major components of Indian cricket. This is where the money comes from.
What are the revenue sources for Indian Premier League teams?
Media Rights: Media rights are an important source of revenue for any IPL team. For some teams, it is about 60% of their total revenue. BCCI sells Media rights or broadcasting rights to Channels. BCCI distributes revenue earned from media rights between teams after excluding their share from it. Sony Entertainment and Star India are two broadcasters who gained media rights of IPL in different seasons. It mainly comprises of the below parameters :
Player Time in Television commercials
Rights to feature in Franchisee websites and apps
Right to feature in interview backdrops
Social Media Communications
Brand Sponsorship: Brand sponsorship to teams is also an important part of revenue for the teams. These sponsors invest their money in the team to get promotion through logo and name placement on the jersey. An important aspect here is intellectual property.
Brand/Logo on Player Jerseys
Player's official imagery rights to be used in brand communications
Title Sponsors: From DLF to Dream 11, the omnipresent IPL sponsors; these are the sponsors who sponsor the title of the league and get registered under their name.
The revenue is generated via In-Stadium:
Promotional Activities/Stalls during match-day
Ticket Sales: IPL has a big craze among Indian cricket lovers. The team owners decide the ticket price. Ticket’s share in the IPL team’s revenue is around 10%. The stadium house remains full in about 60 percent of the matches played. The home team gets a fixed share of the total ticket sales and all IPL team owners earn money through the sale of tickets also. Fan engagement is also an integral aspect of it which is managed through:
Rights to connect with Fan Clubs
Usage of fan databases
Merchandising: The game merchandise market in India is growing at an annual rate of 100 percent. This market is about 30 million dollars. Every franchisee sells its merchandise. This includes T-shirts, caps, bats, wristwatches, and many other items.
With cricketing passions continuing to rise, the future is bright for the product. It is therefore imperative for franchisees to stay in-line with these major themes.
After all these revenue sources everyone might be thinking that the IPL team earns tons of money but there are many expenses, they have to bear to conduct team season
What do you think?
Written By: Areeb Sanadi & Kashish Pahwa